Municipalities, Unions Need To Find Middle Ground

September 27, 2013

It is pretty obvious -given the fact that 44 Chautauqua County municipalities are eligible to participate - that a Financial Restructuring Board is necessary in New York state.

The restructuring board is an admission by Gov. Andrew Cuomo that financial control boards don't work anymore in part because new costs aren't what is driving rising budgets and tax levies. It is old costs - things like pensions and health care for retired employees or employee contracts that are too generous and can't be negotiated backward due to the Triborough Amendment - that are driving the crisis-like state of local governments.

Cuomo's Financial Restructuring Board is designed as a place where eligible municipalities can go, participate in discussions with the restructuring board and leave with recommendations that would help restore the local government to better financial ground. The restructuring board can also serve as an alternative to the Public Employee Relations Board and act as an arbitrator in disputes between the municipality and unions, though both the municipality and the union must agree to appear before the Financial Restructuring Board.

Perhaps one of the biggest problems with the Financial Restructuring Board is that it is voluntary. Each one of those 389 municipalities statewide, and 44 each in Chautauqua and Cattaraugus counties, that are eligible have to agree to participate. It is unclear if the opportunity to receive up to $5 million to implement the board's suggestions will bring any of the eligible municipalities to the table, especially since agreeing to restructure provides no guarantee that the new entity will get any help with the biggest cost drivers in any local budget - employee salaries, benefits and pension costs.

While Cuomo has said it is in everyone's interests to undertake the reforms the state needs, it isn't typically in the interest of public employee unions to give up long-held protections as long as the Triborough Amendment is in effect. The Triborough Amendment means not only do lucrative contracts never expire, they just keep getting more expensive.

The state hasn't wanted to be the bully to municipalities by forcing them to participate. At the same time, the state isn't likely to be the bad guy to labor unions by making them budge on anything that could help taxpayers in the long run.

If the Financial Restructuring Board can't help municipalities deal with employee-related costs, it is doomed to failure.